Role Reversal

by Hugh

The Taiwanese firms, Shih argues, now have enormous clout in the PC industry. In the US, we regard branding and
marketing—convincing people what to buy—as core business functions. What Asustek proved is that the companies with real leverage are the ones that actually make desirable products. The Taiwanese laptop builders possess the atom-hacking smarts that once defined America but which have atrophied here along with our industrial base. As far as laptop manufacturing goes, Taiwan essentially now owns the market; the devices aren’t produced in significant volumes anywhere else.

If you had asked Taiwanese hardware CEOs a few years ago about their relationship with Dell, HP, and Apple, they’d have told you that the American companies did the branding and sales while outsourcing their design and production to Taiwan. Today the view from Asia is increasingly the reverse. “When I talk to them now,” Shih laughs, “they say, ‘We outsource our branding and sales to them.'” [more…]